House Price Update to 31 August 2011

UK House Prices Situation: Broadly stable with underlying weakness

UK House Prices Forecast: Any rise in unemployment will weaken house prices

House Prices Up 1.3% in July

The average house price in England and Wales rose by 1.3% in July, according to the latest house price index published by the Land Registry. This is the largest monthly movement since January 2010 and brings the annual rate of change for the last year to -2.1%.

The Land Registry records the sale of every property in England and Wales, including cash purchases, and uses previous sale prices to calculate the rise or fall in each property's value. This makes the Land Registry house price index the most complete and authoritative survey available.

According to the Land Registry, the average property price in England and Wales is now £163,049. Terraced housing is currently the cheapest type of property, with an average price of just £124,453, down 2.4% on the same time last year.

The average price of a flat or maisonette has also fallen by more than the average and is down 2.8% on July 2010. As we have seen previously, detached housing has faired best, falling by just 1.7% on average over the last year. This is a reflection of housing market and mortgage market circumstances, which currently favour cash-rich buyers at the upper end of the market.

The Land Registry's latest report also highlights an interesting fact about London house prices. Despite average house prices in London continuing to rise since September 2009, the pattern of house price change in London has been very similar to the rest of England and Wales; rising to a peak mid-2010 and then slowing again. The difference is that while the rate of change has fallen into negative territory in the rest of England and Wales, it has not fallen below 0 in London.

Read about UK House Price indexes / key statistics that track the ups and downs of house prices

Read our take on the Credit Crisis the effect on UK House Prices and Mortgages. A Special Report

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